A look at the sneaky fees at Canada’s biggest tourist spot that some call ‘a total cash grab’ | CBC News

With around 14 million annual visitors, Niagara Falls is already a potential cash cow to the many area businesses serving tourists. But at some of them, visitors are finding contentious fees added to their bills — and CBC Marketplace has found they’re growing.

If noticed at all, tourists typically see them next to provincial sales tax, or the city’s mandatory accommodation tax.

Tourists and critics say that placement on the bill gives the appearance of a government-mandated charge. But that is not the case.

“It’s going to the owner” of the business, said Janice Thomson, president and CEO of Niagara Falls Tourism.

• Watch the full investigation on Friday at 8 p.m. on CBC-TV or catch up anytime at CBC Gem.

Just as there is no consistency in how much is charged — Marketplace found they ranged from three to 12 per cent — there is no single name for the added fees. They go by names such as NFDF, or Niagara Falls Destination Fee, and TIF, or Tourism Improvement Fee. There’s even an LF, or Luxury Fee, among many others. 

While they are not charged at every hotel, restaurant or attraction, random spot checks conducted by Marketplace over nearly a decade show the number of businesses adding fees to customer bills is growing, as is the amount being charged. 

For instance, a $150/night hotel charge would see up to an additional $18 added.

“It’s a total cash grab,” a server at Milestones restaurant told an undercover Marketplace producer. When asked by customers, she says she “cringe[s] every time and I’m totally honest about it because that’s what it is.” 

The restaurant charges a six per cent “Luxury Fee” at its Niagara Fallsview location, though no such charge exists at most other locations of the chain, according to the restaurant’s parent company, Foodtastic.

“It’s clearly deceptive,” says Prof. Andrew Ching, a marketing and economics professor at Johns Hopkins Carey Business School. 

What’s the fee for? Front-line staff offer incorrect explanations

Critics of added fees say they lack transparency, particularly when an array of names are used. Many visitors may not know what the acronyms stand for, and the Marketplace spot check elicited sometimes conflicting accounts of what the fees are for.

In a hidden camera spot check of hotels and restaurants, journalists asked for an explanation of the added fees and received some misleading explanations from front-line staff.

At the Days Inn, a staffer described it as a Daily Mandatory Tax before correcting herself and calling it the main Mandatory Charge, which the hotel combines with the recently instituted Mandatory Accommodation Tax (MAT) of $2 per night, the only fee actually collected by the city.

The Radisson front desk described it as an environmental fee: “It pays to recycle.”

The Skylon Tower overlooking the Falls charges the lowest figure documented, an added three per cent on top of the admission price. Staff explained the APF, or Attractions and Promotions Fee, pays for renovations and landscaping, among other things, but could be removed if requested. 

At a nearby TGI Fridays, a server said the NFDF, or Niagara Falls Destination Fee, “goes towards improving the tourist experience,” while at IHOP, the server said he had been trained to explain the 10 per cent NFDF as “mandatory” and going toward “maintenance and fireworks.”

In fact, the city’s famed fireworks are paid for by a separate fund, which receives money from the MAT.

Ching opposes fees that could be construed as taxes, and is concerned by front-line staff providing false information.

“I would say this is very problematic,” he said.

The server at Milestones was upfront about the Luxury Fee. 

“I always joke that it should be called the BS instead of the LF,” she told Marketplace journalists posing as tourists. She described the fees as “insulting because the prices are jacked up in tourist areas everywhere already.”

Government has promised action before

The Ontario government has allowed destination marketing fees in tourist communities since 2004. Multiple communities adopted such fees, including Niagara Falls.

The city also now collects the MAT from certain hotel stays. The money collected funds tourist initiatives in the city.

But the fees being added are in addition to the MAT. 

They are not designed to be collected by a third party, like a tourism authority. They are solely another revenue stream for the businesses that collect them, according to Thomson.

While hotels do show the added fees when a reservation is made, the Marketplace visits found some restaurants do not provide notice of the fees on menus or signs.

WATCH | Tracking sneaky add-on charges in Niagara Falls, and how to spot them:

Investigating extra fees tacked on to bills in Niagara Falls

Marketplace journalists go undercover to investigate sneaky fees added to bills in Niagara Falls.

Marketplace reached out to all 12 establishments we visited.

The parent companies of Days Inn, Milestones, Embassy Suites and Starbucks sent us statements, saying they don’t control the pricing, and charging those extra fees is unique to the independently operated locations in Niagara Falls. 

The Radisson said its four per cent resort fee is on the low end comparable to its competitors and goes toward amenities guests can enjoy while staying at its property, not an environmental fee as Marketplace was told. 

The company said it’s working with staff to ensure the messaging is clear moving forward.

In 2017, Ontario’s then-Tourism Minister Eleanor McMahon told Marketplace: “If businesses in Niagara are not being transparent and they’re not telling people what the fee is used for, then not only am I concerned about that, then we’ll engage and do something about it.”

And yet there is no indication the government took any action.

Marketplace shared its latest findings with the Ontario Ministry of Tourism, Culture and Sport and asked if it would investigate how the fees are marketed and collected. Instead, it directed us to Ontario’s Ministry of Public and Business Service Delivery, which said businesses cannot misrepresent consumer fees as taxes, and any misrepresentation about the purpose of a fee may be considered in violation of the Consumer Protection Act.

The ministry also said any corporation convicted of an offence could be fined up to $250,000.

Ministry investigations can begin with complaints from consumers, but there is no indication the provincial government plans to investigate or engage in enforcement. 

City can’t force companies to change

Longtime Niagara Falls Mayor Jim Diodati says businesses should be transparent and inform customers about the fees before purchase, and explain what they’re for.

But, he says, the city is powerless to force change.

Diodati is calling on the province to use its powers to “investigate to find out first of all if it’s allowed, if it’s legal, and the question is if it’s a good idea.”

He does defend the addition of fees at these businesses, however, especially with the devastating impact of the COVID-19 pandemic across the tourism sector.

Though he acknowledges that restaurants and attractions could take a different approach, including by increasing the cost of their rooms, meals and entry prices, rather than tacking on fees many tourists don’t understand.

Diodati has advice for tourists.

“I always tell people, first off, make sure [it’s] buyer beware, and if it’s on a hotel bill, you should have received an email confirmation. You should have read it, right? Do your diligence, do your homework, right?”

And if it’s not on the bill, he says, “well then you don’t have to pay it.”